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04.08.2005 General News

Employment in the formal sector has declined steeply - Lecturer


Accra, Aug. 4, GNA - Employment levels in the formal sector have registered a steep decline over the years, Dr Augustine Fritz Gockel, an economist and lecturer at the University of Ghana, said on Thursday. He attributed the downturn to public sector reforms such as retrenchment and downsizing policies, privatisation and consequential exit initiatives and economic growth points that were not based on traditional sources of labour.

Speaking at a day's sensitisation workshop for members of the Judiciary in Accra, Dr Gockel quoted the Ghana Statistical Survey (GSS) as saying the formal public sector employment, which was as high as 333,000 in 1960 declined to 186,000 in 1991.

The workshop organized by the National Labour Commission (NLC) on the theme: "Understanding Labour Act 651" seeks to provide the members of the Judiciary with sufficient information on the law to ensure adequate delivery of justice on issues regarding labour. Sponsored by the United States Agency for International Development (USAID) the forum would also deal with the institutional framework of the law as well as steps to guide disputants about employment relations. He said the loss in formal sector jobs coupled with high growth rates in the economically active population suggested a burgeoning informal sector estimated at about 90 per cent of the total labour. The reforms, however, had a consequential effect on the economy since huge sums of money were used to compensate workers, who were laid off.

Dr Gockel said as governments and enterprises were not able to pay the loans contracted to settle retrenched workers "what was a real sector crisis only became a financial sector crisis. "By 1990, non-performing loans and other government-guaranteed obligations to state-owned enterprises were 431.4 billion cedis; the non-performing loan of the private sector was 421.9 billion cedis," he said.

The financial crisis further limited the ability of firms to increase output and, therefore, incomes and employment until the international community came out with interventions to redeem the situation.

Mr Danso Acheampong, Deputy Chairperson, NLC, noted that it was not usual that members of the Bench were sensitised to the provisions of new enactments.

"This near oddity, if it may so be described, has come about due to the history of the new law, its role in promoting economic growth and its alternative mechanism dispute resolution of industrial disputes." He expressed optimism that the participants would be sufficiently informed on the provisions of the new labour law to enable them to guide disputants in employment relations to address their complaints to the Commission for less time-consuming and inexpensive settlement. Mr Acheampong said as an instrument promoting harmonious industrial relations, the Commission would use effective dispute resolution practices to foster cooperation among the labour market players and mutual respect for their rights and responsibility.

He noted that since the Commission was inaugurated it had received more than 200 complaints from individual workers, trade unions and employers. "Some have been settled, others are being processed and mediation in the rest is underway."

The Commission constantly monitors the labour scene for signals of industrial unrest, liaises with parties concerned and facilitates negotiated settlements. 04 Aug. 05